According to an annual survey conducted by Bankrate.com, more than a quarter of Americans have no emergency savings. Of those who do have savings, 67 percent have less than six months worth of expenses saved. Having
access to just $500-1,000 in savings could help most people meet unexpected financial challenges, said K-State Research and Extension family resource management specialist Elizabeth Kiss.

While some people had built up savings prior to the recent recession, they might have used that money, Kiss said. The purpose of emergency savings is to have money on hand when disaster strikes or money is tight, but those funds need to be replaced as soon as a household is able to after the emergency occurs.

"You're saving for an unknown," she said. "We don't like to think about bad things happening, and it's hard to imagine it until something happens. I think that captures the reasons why people don't have adequate emergency savings."

Kiss said savers should try to have six months to a year's worth of living expenses on hand to combat any unforeseen expenses.

"It's living expenses, not income, so it's likely less than your total income," she said. "Regardless of the amount, most of us would probably do better to have more."

Car maintenance, home maintenance, storm damage repair, and travel are unanticipated expenses and reasons to have emergency savings on hand, Kiss said. While putting money away for the unknown makes saving difficult, having cash allows for less dependence on credit cards and other sources of funding.

"It might give you more options than you would have if you don't have that cash," she said. "I think that's important to think about."

The first step to take in building an emergency fund is deciding where to store your money.

"You might want to have more than one place," Kiss said. "If the power is out in your community, the ATMs may not work. If you don't have cash, you might not be able to buy things, because the store may not be taking cards. You want to have a bit of cash somewhere safe."

Spread out your savings, Kiss advised. Keep some cash stored in a safe, or in a secure place in your home or office. Depending on your financial situation, it might be helpful to store some funds in separate accounts, or have one account exclusively for your emergency fund.

Make a habit of putting money into your emergency fund each month, she said. Decide on a dollar amount, and move it to your emergency fund account each time you receive a paycheck. Make sure your savings goals are realistic, and avoid setting them too high.

"Think about how much you can realistically save every month, and think of it as putting it aside rather than just saving," Kiss said. "You might also move some for retirement or other savings goals that you have, and then you know what you have left to pay the bills."

What if you don't have $25-50 to save each month? Kiss advised to watch for "spending leaks," small, regular purchases like morning lattes, soda and candy bars, and trips to the vending machine.

"It doesn't mean you have to go without," she said. "Think of ways you can meet those needs, but pay less. If you like to drink pop, buy it at the store. Make coffee at home."

Homeowners can look for ways to save on fixed expenses such as heating and cooling, Kiss said. Small changes, including setting the thermostat a few degrees higher in the summer, closing curtains and using fans can curtail those expenses.

"It's always good to review those services on a regular basis," she said. "Look over them at least once a year, if not more frequently. Keep track of some of these changes and see if that doesn't help."

The ultimate goal is to make saving a priority, Kiss said. Think of an emergency fund as you would any monthly utility.

"You need it just like you need heating, cooling and water," she said. "Put it in with your bills, and think of it that way."

The greatest advantage to having an emergency fund is having something to fall back on.

"It can be great peace of mind," Kiss said.

More information on money management is available at county and district extension offices, and on the extension website, www.ksre.ksu.edu.